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Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ Data concerning Part XYZ appear below Capacity in units

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Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ Data concerning Part XYZ appear below Capacity in units Selling price to outside customers Variable cost per unit 70,000 $110 5.75 Fixed cost per unit (based on capacity) The company has Division B that could use Part XYZ in one of its products Decision B is currently purchasing 15,000 of Part XYZ per year from an overseas supplier at a cost of $109 per part Required: a. Assume that Division Au selling all of Part XYZ it can produce to outtade customers. What is the acceptable range, if any, for the transfer price between the two division? [4 marks] b. Assume again that Division A is selling all of Part XYZ it can produce to outside customers. Also ause that 53 in variable expenses can be avoided on transfers within the company due to reduced shipping the two divisions? (4 marks] c. Based on requirement (a), assame Division A offers to sell 15,000 units to Division B for $125 and that Division Brefuses this price. What will be the loss is potential profits for Division A [2 marks] for the foolbar, press ALT+F10 (PC) or ALT+FN+F 10 (Mac) to outside customers What is the acceptable range, if any, for the transfer price between the two divisions? (4 marks] oduce to outside customers. Also assume that $3 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs What is the acceptable range, if any, for the transt units to Division B for $125 and that Division B refines this price. What will be the lom in potential profits for Division A? [2 marks]

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